Childhood Poverty Persistence: Facts and Consequences

Abstract

The U.S. child poverty rate has fluctuated between 15 and 23 percent for the past four decades, but far more children—37 percent—live in poverty at some point during their childhoods. Being poor at birth strongly predicts future poverty status. Using the PSID, this study finds that 49 percent of children who are poor at birth go on to spend at least half their childhoods living in poverty. In addition, children who are born into poverty and spend multiple years living in poor families have worse adult outcomes than their counterparts in higher-income families.

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Introduction

Child poverty rates have ranged between 15 percent
and 23 percent over the past four decades.1
These rates, however, do not reveal how long
children live in poverty. Many families cycle into
and out of poverty over time, while others remain
poor many years. Persistent poverty among children
is of particular concern, as the cumulative
effect of being poor may lead to especially negative
outcomes and limited opportunities.

Using Panel Study of Income Dynamics
(PSID) data from 1968 through 2005, this brief
examines children's poverty status from birth
through age 17 and provides new information on
persistent poverty among children. We examine
the incidence and duration of poverty for all
children together and separately by race, because
poverty rates differ substantially for white and
black children.2 Then, we examine outcomes for
the same children at ages 25 to 30 to measure the
relationship between childhood poverty and adult
outcomes. We answer five key research questions:

How many years do children spend living in
poverty, and what proportion of children is
persistently poor (i.e., spend at least half their
childhoods living in poverty)?

How often do children move into and out of
poverty during their childhood?

How many children who are poor at birth
remain poor throughout their childhood?

How does poverty status at birth relate to
adult outcomes such as poverty, educational
attainment, premarital childbearing, and
employment?

How does persistent childhood poverty relate
to adult outcomes?

This study is the first to highlight the relationship
between poverty status at birth and children's poverty
persistence and subsequent adult
outcomes. It builds on the substantial literature
that examines childhood poverty and the link
between childhood poverty and adult outcomes.3
By following children from birth through age 30,
we capture the experiences and outcomes of people
over critical periods in their lives. Understanding
the link between poverty status at birth and
future outcomes provides important practical
program and policy implications. For example,
if children who are poor at birth have worse
outcomes, poverty status at birth could be used
to direct resources toward children who are disproportionately
more likely to have negative
adolescent and adult outcomes.

Among our results:

Sixty-three percent of children enter adulthood
without experiencing poverty, but 10 percent
of children are persistently poor, spending at
least half their childhoods living in poverty.

Black children are roughly 2.5 times more
likely than white children to ever experience
poverty and 7 times more likely to be persistently
poor.

Children who experience poverty tend to cycle
into and out of poverty, and most persistently
poor children spend intermittent years living
above the poverty threshold.

Being poor at birth is a strong predictor of
future poverty status. Thirty-one percent of
white children and 69 percent of black children
who are poor at birth go on to spend at
least half their childhoods living in poverty.

Children who are born into poverty and spend
multiple years living in poor families have
worse adult outcomes than their counterparts
in higher-income families.

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